Neither the US nor China can win the AI race alone, BofA analyst says

The Bank of America analyst, Matty Zhao, correctly identifies the core problem. The AI race is not a zero-sum game between two nations. China's reliance on imported advanced chips and high-end materials creates a hard limit. The US faces its own infrastructure challenge with an aging power grid, averaging 30 to 40 years old. Both countries need external partners to advance AI capabilities.

For Asia, this means continued opportunity for chipmakers and material suppliers. Taiwan's TSMC and South Korea's Samsung Foundry remain critical. Their advanced fabrication capabilities are indispensable for both US and Chinese AI ambitions. This interdependence ensures a degree of stability for these key Asian tech players, even amid geopolitical tensions.

The thing to watch is how this interdependence shifts over the next five years. China's push for domestic chip production will test the resilience of current supply chains. If China significantly reduces its reliance on foreign advanced chips, the balance of power could change. This would directly impact Taiwanese and South Korean semiconductor exports.